Google Buys DoubleClick for $3.1 Billion

Google reached an agreement today to acquire DoubleClick, the online advertising company, from two private equity firms for $3.1 billion in cash, the companies announced, an amount that was almost double the $1.65 billion in stock that Google paid for YouTube late last year.

The sale offers Google access to DoubleClick’s advertisement software and, more importantly, its relationships with Web publishers, advertisers and advertising agencies.

For months, Google has been trying to expand its foothold in online advertising into display ads, the area where DoubleClick is strongest. Google made its name and still generates most of its revenue from search and contextual text ads.

DoubleClick, which was founded in 1996, provides display ads on Web sites like MySpace, The Wall Street Journal and America Online as well as software to help those sites maximize ad revenue. The company also helps ad buyers — advertisers and ad agencies — manage and measure the effectiveness of their rich media, search and other online ads.

Not only is this a jarring blow to Microsoft, it’s also part of Google’s bid for global advertising domination in a world increasingly dependent on Web services. Find out why on Emerging Earth.

Google Acquisition Tip: Go Crazy

Wanna sell something to Google for a billion dollars? Here’s a tip: go crazy.

“We look at everything very carefully,” Salman Ullah, Google’s director of corporate development, said yesterday in a speech at a meeting of the Los Angeles Venture Association. “The really crazy ones do really well.”

“The crazy ones mean they ignore the usual restraints of investment levels required or design parameters or ‘Gee I need more servers than anyone ever thought was possible’,” Ullah said. “When you free yourselves from these constraints, you create crazy, cool things.”

(Via John Batelle.)